Rhode Island Tax Free Weekend 2017

We will have all of the up-to-date information regarding the potential upcoming Rhode Island Tax Free Weekend.

Rhode Island Tax Free Weekend Frequently Asked Questions.

Q. Will there be a Rhode Island Tax Free Weekend 2017?

A. Rhode Island lawmakers are considering establishing a sales tax holiday for this year.

Q. If there was a 2017 RI Tax Free Weekend, when would it be held?

A. In August, most likely the first or second weekend.

Q. What items will be tax-free during the potential Rhode Island Sales Tax Holiday?

A. Back to School items. We will know more if it becomes official.

Were you looking for Massachusetts or Connecticut‘s Sales Tax Holiday?

  • Income tax: 3.75% – 5.99%
  • Sales tax: 7%
  • Property tax: 1.55% average effective rate
  • Gas tax: 33 cents per gallon (regular and diesel)

Like most other states in the Northeast, Rhode Island has both a statewide income tax and sales tax. The income tax rates range from 3.75% up to 5.99%. The highest marginal rate applies to taxpayers earning more than $137,650 per year. Those rates are near the national averages for state income taxes and the same is true of the state’s sales tax, which is 7%. Property taxes in the Ocean State are a different story: the average homeowner there pays just over $3,800 a year in property taxes, the sixth highest average annual property tax payment of any U.S. state.

Rhode Island Income Tax

The Rhode Island state income tax is based on three tax brackets, with lower income earners paying lower rates. The table below shows the income tax rates in Rhode Island for all filing statuses.

Income Tax Brackets

  • All Filers
Rhode Island Taxable IncomeRate
$0 – $60,5503.75%
$60,550 – $137,6504.75%

Those rates do not apply to total (or gross) income but rather to Rhode Island taxable Income, which is often substantially smaller because it incorporates adjustments and deductions. Rhode Island taxable income is calculated based off of federal adjusted gross income (AGI). Net modifications are subtracted (or added) to federal AGI to reach modified AGI.

Modifications, which can be found on Rhode Island schedule M, consist of additions and subtractions. These are typically of income sources that that are not taxed federal but are taxed in Rhode Island. Additions include income from state or local debt obligations for places outside of Rhode Island. Subtractions include debt from U.S. government obligations, contributions to 529 college savings plans (up to $500, or $1000 for joint filers), exemptions of profits or gains for writers and artists and modifications for performance based compensation under the Rhode Island Jobs Growth Act (which exempts up to 50% of bonuses).

Note that Social Security income cannot be subtracted. In fact, Rhode Island is one of six states that taxes Social Security benefits at the same level as the federal government.

Rhode Island Deductions, Exemptions and Credits

Once you have calculated modified AGI, next subtract deductions and exemptions to arrive at taxable income. Itemized deductions are not allowed in Rhode Island, but the standard deduction in the state is $8,275 for single filers and married persons filing separately, $16,550 for joint filers and qualifying widowers and $12,400 for heads of household. The personal exemption is equal to $3,850, which can be claimed for every dependent (including yourself and your spouse) listed on your federal tax return.

Note that the standard deduction and personal exemption are phased out for taxpayers with over $192,700 in modified AGI. The deduction and exemption decrease in steps until they reach $0 for taxpayers with modified AGI of $214,700 or higher.

Taxpayers in Rhode Island can also claim the credit for child and dependent care expenses, as well as the earned income credit. These are both equal to 25% of the respective federal credits.

Rhode Island Sales Tax

The sales tax rate in Rhode Island is 7%. There are no local (city or county) sales taxes, so that rate is the same everywhere in the state. The tax applies to the sale, lease or rental of most goods and a number of services in the state.

Important exemptions to the tax include: groceries (i.e. non-prepared food), clothing, prescription drugs and medical equipment such as wheelchairs and prosthetic devices. No sales tax is collected on these items.

On the other hand, some products and services face additional taxes. Hotel and motel rentals are subject to an additional 6% tax (so a total tax of 13%). Restaurants, bars and other eating or drinking establishments face an additional 1% tax. The state also collects excise taxes on a number of products, as described in the sections below.

Rhode Island Property Tax

Want to buy a beach house on Narragansett Bay? Keep in mind the Rhode Island property taxes you’ll need to pay, which are among the highest in the U.S. The statewide average effective property tax rate—that is, property taxes as a percentage of home value—is 1.55%. This is the 10th highest in the U.S. The average homeowner pays nearly $4,000 a year in property taxes in Rhode Island.

Rhode Island Estate Tax

The estate tax in Rhode Island applies to gross estates of $1.5 million or more (for deaths occurring during 2015) or $921,655 (for deaths occurring during 2014). Estates above those exemptions are taxed at rates ranging from 0.8% to 16%. Rates increase by 0.8% in regular increments. The top rate of 16% applies to gross estates that are at least $10.04 million above the applicable exemption.

Rhode Island Gas Tax

The Ocean State has the 11th highest gas tax in the country. The tax is equal to 33 cents per gallon, which would add up to $165 per year for someone who drives 12,500 miles in a car that averages 25 miles per gallon.

Rhode Island Alcohol Tax

In 2013, Rhode Island repealed sales taxes on liquor and wine in order to keep prices in line with other states in the region. The sales tax still applies to beer, and excise taxes are still collected on all types of alcohol. The excise tax on liquor is $3.75 per gallon, or 75 cents per fifth. The excise tax on wine is 60 cents per gallon, or about 12 cents per bottle.

Rhode Island Cigarette Tax

Rhode Island’s tax on cigarettes is the third highest in the U.S. The tax is $3.50 per pack of 20, which is 17.5 cents per cigarette.

  • The official name of Rhode Island is: State of Rhode Island and Providence Plantations. That is the longest state name.
  • Rhode Island is the smallest state by area. Its land area is just 1,045 square miles.
  • Aquidneck Island is the largest of Rhode Island’s 35 islands. It has a population of about 60,000.